Matching Markets and Organ Donations
http://www.npr.org/sections/health-shots/2015/06/11/412224854/how-an-economist-helped-patients-find-the-right-kidney-donor
Alvin Roth, the laureate of the 2012 Nobel Prize in Economics, works to find practical application for economics theories—for example by working with New York City high schools to come up with a better lottery system and by improving medical residency assignments. One particular area he has improved through economics principles is the kidney donation system—that is, matching kidney donors to those who need a transplant, which he has bettered through thinking of the kidney exchange as a marketplace. With more than 100,000 people in the United States on the waiting list for a kidney, his work benefits many patients and doctors.
The theory of matching markets relates directly to the exchange of organ donations, and not only because Roth has worked with the system for its improvement. If the “marketplace” of organ donations were to be simplified in order to be put into terms that we have covered in class, the donors would be sellers, and those who need a transplant be buyers, with kidneys as goods. Thus, a setup could be made where those who need a kidney the most would have the highest value.
The most interesting caveat of Roth’s redesign of the organ donation system is the “exchange chain:” by figuring out that donors who weren’t paired with a patient did not require simultaneous exchanges, there could be a “chain” of transplants that, if broken along the way by someone who balked on donating a kidney, or a patient who did not need it anymore, no one would suffer. Thus, Roth utilized long chains of exchanges in the system.
Roth emphasized in the article that figuring out and implementing a good market design relied upon “finding inside champions:” as market design is an outward-facing form of economics, that is, dependent on the people in the market, he needed to talk to the patients, the donors, the doctors, and the administrators in order to find a suitable system for the network.